updated 02:57 pm EDT, Wed August 15, 2012
May be used to justify royalty demands
In its ongoing trial with Apple, Samsung is planning to call two witnesses known for arguing for high patent royalties, according to FOSS Patents. The most notable of these may be David Teece, a professor at the University of California, Berkeley, who recently testified on behalf of Motorola Mobility against Microsoft over the matter of H.264 video codec patents. Teece argued that a single standards-essential patent could be equal or greater in value than a large number of other patents relating to a standard, since it "takes only one bullet to kill."
A US International Trade Commission judge ultimately blocked Motorola attempts to get a US import injunction against Microsoft for failing to pay a demanded 2.25 percent royalty on products like Windows 7 and the Xbox 360. The ruling stated that "the royalty rate offered by Motorola of 2.25%, both as to its amount and the products covered, could not possibly have been accepted by Microsoft," and also claimed that the evidence suggested Motorola "was not interested in good faith negotiations and in extending a [F]RAND [fair, reasonable, and non-discriminatory] license to it [Microsoft]."
Samsung has sought out high royalties from Apple in the past, for instance asking for a 2.4 percent royalty in a Dutch lawsuit over chip technology. That case was thrown out, however, since the demanded royalties were seen as excessive, and Samsung was ruled to have not negotiated in good faith or complied with FRAND requirements. The company is in fact calling for a 2.4 percent royalty in the current case as well, which could potentially backfire.
Teece should testify on Friday. The other witness is a Swedish consultant, Eric Stasik, who has made similar statements on the value of patents; writing about GSM, for example, he has argued that "the relationship between the number of patents and the total royalty rate is not linear." He remarks that "a license to a single ESSENTIAL patent may be 2.5%, a license to two ESSENTIAL patents may be 3.5%, and a license to three ESSENTIAL patents may be 4%, while a license to ten or more ESSENTIAL patents rarely exceeds 5%."